Allianz Makes $1.6 Billion Offer for 51% of Singapore’s Income Insurance

Allianz SE agreed to buy a majority stake in Singapore’s Income Insurance Ltd. for about S$2.2 billion ($1.6 billion) to strengthen its presence in Asia.

The German company plans to acquire at least 51% of Income Insurance for S$40.58 a share, it said in a statement from Munich Wednesday, confirming an earlier Bloomberg News report. NTUC Enterprise Co-operative Ltd. will retain a substantial stake in Income Insurance.

Allianz said the deal will turn it into the fourth-largest composite insurer in Asia, adding a household name in Singapore that distributes a full range of life and non-life products. Chief Executive Officer Oliver Baete, who is expected to outline new financial targets for Allianz later this year, has focused on smaller takeovers to streamline operations while returning excess capital to shareholders.

The deal “is a low-risk way to materially improve the reach and capabilities of Allianz in the Asia-Pacific region,” analysts at Jefferies wrote in a note.

Income Insurance is designated as one of Singapore’s four systemically important insurers, according to its website. The deal is subject to regulatory approval, with closing expected by the first quarter of next year.

Morgan Stanley is advising Income Insurance and NTUC on the transaction, people familiar with the matter said, asking not to be identified discussing private information. A representative for Morgan Stanley declined to comment.

Photograph: Crowds by the Merlion and Marina Bay Sands in Singapore, on Saturday, July 9, 2022. Photo credit: Lauryn Ishak/Bloomberg